From the article: <i>Of course, this does not mean that it is a business that is guaranteed success in the future. Some questions still remain around the cost of its revenue and the company’s ability to continue on the same growth curve as it has in recent years.</i><p>And the article is too lazy to compare the plans for what the two companies want(ed) to do with the cash. Google's prospectus wanted the cash to finance new operations. Facebook's IPO prospectus says it wants to invest the proceeds in bonds. In other words, it has no business rationale for the IPO.<p>-----<p>Source: 'as it admitted in its filing on Wednesday, its cash flow and credit “will be sufficient to meet our operational needs for the foreseeable future”. ... So what are its plans for the additional $5bn it may raise from an IPO? It intends to put the cash into US government bonds and savings accounts, and perhaps use some to pay the tax due on converting into shares the “restricted stock units” it has given to its 3,200 staff.'<p><a href="http://www.ft.com/intl/cms/s/0/cd03c402-4dba-11e1-a66e-00144feabdc0.html" rel="nofollow">http://www.ft.com/intl/cms/s/0/cd03c402-4dba-11e1-a66e-00144...</a><p>(registration walled)
I used to be the guy who'd always ask how Facebook will make money and say it's overvalued.<p>Today, given the hard revenue and profit numbers I no longer argue that Facebook is a real business and deserves a largish valuation. I also became a regular Facebook user.<p>But I still have a funny feeling about it. It doesn't provide a userful service to me. It's just a centralized hub for wasting time. I do it with my social network, but somehow it's not a real social network, in so far as I don't make new friends or even add value to existing friendships. Of course, you could argue that Facebook defines the term social network.<p>If Facebook disappeared off the face of the Earth, I wouldn't really care. I think the reason why this is not a problem for Facebook is that I'm the product, not the customer.
As others have pointed out elsewhere, Facebook is in it's 8th year, Google was in it's 5th year. Google has a much faster growth attributable to larger revenues in the beginning than Facebook, percentage growth seems to be the same.<p>(Update) I found the growth graph interesting:<p><a href="http://techcrunch.com/2012/02/05/facebook-pre-ipo-google/" rel="nofollow">http://techcrunch.com/2012/02/05/facebook-pre-ipo-google/</a>
The real difference is that Google's IPO was a Dutch auction. This was particularly accurate because of how much information asymmetry there was with Google. Not everyone knew where the value in Google was. Everyone knows about Facebook. That complicates things. I wrote about this recently if you guys wanna take a look. <a href="http://ashoknayar.wordpress.com/2012/02/04/ipos-the-social-web-and-an-auction-from-holland/" rel="nofollow">http://ashoknayar.wordpress.com/2012/02/04/ipos-the-social-w...</a>
I don't get the figures. He says "all dollar figures in thousands", but then puts "US$" before them. Surely in this case you should say "all figures in thousands of dollars" and not put any units in the cells?